Alliance Laundry Holdings Inc.ALH
Alliance Laundry Holdings Inc. Debt Disclosure
Debt
The following table presents the Company’s debt, other than debt related to securitization activities discussed in Note
6 - Asset Backed Facilities and Note 7 - Securitization Activities.
(in thousands) | December 31, 2025 | December 31, 2024 | |
Term Loan due August 2031 (5.98% and 7.84% as of December 31, 2025 and 2024, respectively) | $1,365,000 | $2,075,000 | |
Finance lease obligations | 236 | 359 | |
Gross long-term debt | 1,365,236 | 2,075,359 | |
Less: current portion of Term Loan | — | (20,750) | |
Less: current portion of finance lease obligations | (113) | (146) | |
Less: unamortized debt issuance costs on Term Loan | (3,496) | (6,725) | |
Less: unamortized original issue discount on Term Loan | (6,991) | (13,193) | |
Long-term debt, net | $1,354,636 | $2,034,545 |
The Company’s effective interest rate on our Term Loan was 6.01% as of December 31, 2025, after taking into
account the impact of issuance costs.
Credit Facility
On August 19, 2024, the Company entered into a credit agreement, by and among Alliance Laundry Holdings LLC
("Alliance Holdings"), Alliance Laundry as the Borrower (“Borrower”), the lenders party thereto and Citibank, as
Administrative Agent (the “Credit Agreement”). The Credit Agreement provides for (i) an initial Term Loan facility (the
“Term Loan”) in the aggregate principal amount of $2,075.0 million and (ii) initial revolving credit facilities (the “RCF”
and, together with the Term Loan, the “Credit Facility”) of $250.0 million principal amount of revolving commitments,
with $225.0 million issuable in U.S. Dollars or Euros and $25.0 million issuable in Thai Baht, with a $102.2 million sub-
limit for issuance of letters of credit and a $25.0 million sub-limit for swingline loans. At closing, the Borrower borrowed
$2,075.0 million of aggregate principal of the Term Loan and did not borrow under the RCF. Upon closing, the Borrower
used the net proceeds of the Term Loan to repay outstanding borrowings under its existing credit facility at the time and to
fund a stockholder dividend distribution. The Term Loan was issued with an original issue discount of 50 basis points.
Interest is payable no less frequently than quarterly at the rate of SOFR plus 3.5% (or the applicable base rate plus 2.5%),
with a 0% SOFR floor. Interest under the RCF accrues at the rate of SOFR plus 3.25% (or the applicable base rate plus
2.25%).
On February 20, 2025, we finalized an amendment to our Credit Agreement, which reduced the applicable margin on
the Term Loan and RCF. The result was an interest rate on our Term Loan of SOFR plus 2.75% and an interest rate on our
RCF of SOFR plus 2.50%. Additionally, we incorporated opportunities for further margin reductions contingent upon
achieving improvements in our leverage ratio. The company incurred $1.0 million of fees in connection with the
amendment. These fees were expensed and included in Other expenses, net in the Consolidated Statement of
Comprehensive Income.
On August 21, 2025, we finalized an amendment to our Credit Agreement, which reduced the applicable margin on the
Term Loan and RCF. The result is an interest rate on our Term Loan of SOFR plus a margin of 2.25% and an interest rate
on our RCF of SOFR plus a margin of 2.25%. Additionally, we incorporated opportunities for further margin reductions
contingent upon achieving improvements in our leverage ratio and rating agency upgrades. The company incurred $1.3
million of fees in connection with the amendment. These fees were expensed and included in Other expenses, net in the
Consolidated Statement of Comprehensive Income. As of December 31, 2025, the interest rate under the RCF was 6.12%.
Additionally, a commitment fee based upon the Company’s leverage ratio is charged on the unused portion of the
commitments under the RCF. As of December 31, 2025, the commitment fee was 0.25%.
During 2025, the Company made total voluntary prepayments on the Term Loan of $710.0 million, consisting of a
$525.0 million prepayment on October 17, 2025, funded with net proceeds from the Company's initial public offering and
cash on hand, and $185.0 million of other voluntary prepayments made during the year. The repayments were first applied
to and eliminated the future required quarterly installment principal repayments.
The Credit Agreement requires certain mandatory prepayments, including from asset sales and, beginning with the
fiscal year ending December 31, 2025, annual prepayments of the Term Loan with 50% of the Company’s Excess Cash
Flow, which steps down to 25% if the Company’s net leverage ratio is below 4.75:1 and to 0% if the net leverage ratio is
below 4.5:1. Excess Cash Flow is defined in the Credit Agreement as consolidated adjusted EBITDA (earnings before
interest, taxes, depreciation and amortization), adjusted for the net change in working capital for the fiscal year, less other
specified deductions such as debt and debt service payments, and interest and taxes paid in cash. Working capital is defined
as current assets excluding cash and cash equivalents less current liabilities excluding current portion of long term debt and
various other adjustments. The Company has not been subject to any mandatory prepayments. Outstanding balances are
fully prepayable on a voluntary basis, in whole or in part, without premium or penalty. The remaining balance of the Term
Loan is due at maturity on August 19, 2031. The RCF matures on August 19, 2029, and it does not require any installment
principal repayments or mandatory commitment reductions. Outstanding balances under the RCF are fully prepayable on a
voluntary basis, in whole or in part, and commitments may be terminated, in whole or in part, in each case without
premium or penalty. Obligations under the Credit Agreement are secured by substantially all of the Company.
The Credit Agreement contains covenants that are customary for similar credit arrangements, including, among other
things, covenants relating to: (i) financial reporting and notification, (ii) payment of obligations, (iii) compliance with
applicable laws, (iv) notification of certain events, and (v) certain covenants limiting the ability of the Borrower and its
subsidiaries to, among other things, sell or transfer assets, consummate fundamental changes, incur or guarantee
indebtedness or liens, make investments, or enter into transactions with affiliates. The Company is in compliance with all
covenants as of December 31, 2025.
The RCF is available, subject to certain conditions, for general corporate purposes in the ordinary course of business
and for other transactions permitted under the Credit Agreement. A portion of the RCF not in excess of $102.0 million is
available for the issuance of letters of credit. There were no letters of credit outstanding and the RCF was not drawn as of
December 31, 2024 and December 31, 2025.
Other Debt
As discussed in greater detail in Note 7 - Securitization Activities, the Company had total debt outstanding of $618.6
million and $553.8 million related to its securitization activities as of December 31, 2025 and December 31, 2024,
respectively.
Prior Refinanced and Terminated Debt
On October 9, 2020, Alliance Holdings entered into a credit agreement, by and among Alliance Holdings, Alliance
Laundry as the Borrower, the lenders party thereto and UBS AG, as Administrative Agent (the “Prior Credit Agreement”).
The Prior Credit Agreement provided for (i) an initial term loan facility in the aggregate principal amount of $1,325.0
million and (ii) an initial revolving facility of $125.0 million principal amount of revolving commitments. This term loan,
set to mature in 2027, was paid off early in 2024 with proceeds from the term loan associated with the Credit Agreement
entered into on August 19, 2024.
On December 2018, an indirect wholly-owned subsidiary of the Company, Alliance Laundry (Thailand) Company
Limited, entered into a 7.5 million Thai Baht revolving credit facility (“Thailand Revolving Credit Facility”). The Thailand
Revolving Credit Facility was terminated on August 8, 2024.
In July 2020, a subsidiary of the Company, Alliance do Brasil Maquinas DE Lavanderia Ltda., entered into an import
financing agreement with the Banco Santander (Brasil) S.A. (“Brazil Import Loan”). The loan was guaranteed by the
Company through a letter of credit in the amount of $2.0 million. The loan allowed for a $2.0 million maximum of
issuances and a maturity of two years after each draw. The loan was used to fund laundry equipment purchases. Effective
December 12, 2024, the Brazil Import letter of credit was terminated.
Debt Issuance Costs and Original Issue Discount
In February 2025 and August 2025, the Company incurred $1.0 million and $1.3 million, respectively, of fees in
connection amendments to the Credit Agreement. These fees were expensed and included in Other Expenses, net in the
Consolidated Statements of Comprehensive Income. Additionally, the Company wrote off a portion of the unamortized
debt issuance costs and original issuance discounts related to the Prior Credit Agreement, resulting in expense of $1.3
million recorded in Other expenses, net in the Consolidated Statements of Comprehensive Income for the year ended
December 31, 2025.
In August 2024, the Company incurred $32.8 million of fees in connection with the execution of the Credit Agreement
of which $30.4 million was expensed immediately and the remaining $2.4 million was capitalized. These fees were
expensed and included in Other Expenses, net and Other expenses, net - related parties in the Consolidated Statements of
Comprehensive Income. The Company also capitalized $10.4 million for original issuance discount in 2024 related to the
New Credit Agreement, which is included in Long-term debt, net in the Consolidated Balance Sheets. Additionally, the
Company wrote off a portion of the unamortized debt issuance costs and original issuance discounts related to the Prior
Credit Agreement, resulting in additional expense of $2.8 million. This amount was also recorded in Other expenses, net in
the Consolidated Statements of Comprehensive Income for the current period.
The following table presents a summary of other disclosure items related to the Company’s debt.
Year Ended December 31, | |||||
(dollars in thousands) | 2025 | 2024 | 2023 | ||
Amortization expense - debt issuance costs | $3,756 | $4,856 | $3,542 | ||
Amortization expense - original issue discount | $6,202 | $2,620 | $1,620 | ||
Debt Maturities and Liquidity Considerations
The aggregate scheduled maturities of long-term debt in subsequent years, are as follows:
Year | Amount Due |
2026 | $113 |
2027 | 79 |
2028 | 30 |
2029 | 14 |
2030 | — |
Thereafter | 1,365,000 |
1,365,236 | |
Less: Current portion | (113) |
Less: unamortized debt issuance costs on Term Loan | (3,496) |
Less: unamortized original issue discount on Term Loan | (6,991) |
Long-term debt | $1,354,636 |
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About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.